Pundita

Monday, January 31

One millimeter at a time

Pundita has been asked to comment on the "win" that the relatively smooth Iraq election represents for Bush policy on Iraq. Any comment we could make is gilding the lily. Of course the election is a milestone for the Bush policy and the war on terror, and it's great triumph for the Coalition of the Willing and the Iraqis who voted. We are somewhat suspicious of the relative calm that marked the balloting day. Yet even if the Iraqi Interim government cut a last-minute deal with the Tehran government to keep terrorist attacks to a dull roar, the biggest loser in Iraq's election was Tehran.

About a million Iranians registered to vote in the Iraq election but porous borders being what they are influence works two ways. The Tehran tyrants will come to rue the day they meddled in post-Saddam Iraq. However, Pundita looks for Tehran to prod Europe to press Bush to quickly define an exit strategy in Iraq, with the American wing of the EU adding to the chorus.

Speaking of Iran, supporters of the Bush Doctrine might wish to look through Eric Miller's Iran Next? . Pundita has faithfully read Miller's weekly essays for more than two years. Miller is skilled at pulling together the prevailing views on an issue and deftly summarizing them. This doesn't mean we agree with his conclusions about foreign policy matters; often we take serious issue. However, Mr. Miller's way of looking at things bears consideration because it reflects the thinking of the Wise Old Men of American Capitalism.

The WOMs don't strive to be terribly right in their views, they seek to avoid being terribly wrong. Thus, they are cautious, suspicious of radical change, full of experience with weathering decades of economic cycles and shakeouts in the financial markets, keenly aware of public perceptions of things, and always looking for The Big Picture.

The views Miller summarizes strike a caution for Americans who support the Pentagon's triumph over DOS-CIA in executing defense policy. From Miller's conclusion, it's clear that the badgering Dr. Rice received during her confirmation hearing is just a taste of things to come. Many factions from within and without this country will escalate their challenge to the US Commander-in-Chief's right to run a war and direct US defense policy.

President Bush's hardest job in his second term, as it has been since he announced the invasion of Iraq, reminds me of a comment Joyce Carol Oates made. She observed that writing a first draft of a novel is akin to pushing a peanut across a sawdust floor with one's nose. By any which way does Bush nudge the American people, and the major governments of the world, into the 21st Century.

The OK Corral is thataway

"Thank you for introducing me to Peter Lavelle's writings. It's a lot to absorb. From what I'm learning it's evident the media are doing a really bad job keeping Americans informed about Russia. Lavelle writes for UPI so there is good reporting available but it doesn't seem to get featured in the mainstream media, at least not in this country.

However, America is at war. Russia's recent negotiations with Syria and Iran are potentially damaging to the US war effort. Given Putin's lack of support for the US invasion of Iraq, I think he would have gone ahead with the negotiations no matter how fairly the US media might have treated him, and even if there had been no US involvement in Ukraine. There has been talk of imposing sanctions on Russia, so I think the situation is becoming serious.
[Signed] Jan in Reston"

Dear Jan:

The situation will become serious when there is talk of imposing sanctions on Germany, France, and Britain for their deals with Syria and Iran. Then we'll know the Bush administration is getting down to brass tacks.

Russia is not an ally of the United States; they're a trading partner. It's the NATO countries that are supposed to be our allies. So it's during discussion with our dear allies about their actions in the Middle East that the United States should be making demands. Until we do this, why should Putin or any other non-NATO national leader join the United States in upholding a double standard?

I don't like Putin's negotiations with Syria and Iran but he's following the approach of the EU Three (Germany, France and UK), who dominate the European Union's approach to foreign relations. And if he stops following the E3 and sides with the United States--Bingo! he's made even more enemies in the EU than he did when launching the anti-corruption drive in Russia. Keep in mind Russia has to live on the same continent as the European Union.

If the State Department would not deploy a double standard with regard to NATO allies, if they adopted a position of integrity, as Bush did by refusing to deal with Arafat, then Putin and other non-NATO national leaders would be looking at a different ball game. How they might react, don't know, but integrity is catching--particularly when it's practiced by the world's leading nation.

Now that we have that off our chest, Pundita takes your point. If we study the Bush war plan, we see that Syria is the next weakest spoke in the Axis of Evil. So Putin's negotiations with Assad, and Russian sales of military equipment to Syria, are of grave concern to the US.

But again, the negotiations of our allies with Syria and Iran are of greater concern at this time. They've already told us to go sit on a tack, if we want military help in dealing with Syria and Iran. More than that, they've signaled they will work to marshal world resistance against any US action, including embargo, which the US wants to take against Iran.

This is showdown time with our NATO allies. But instead of showing up at the OK Corral, Washington wants to hang out in the saloon and talk about Russia. Put yourself in Vladimir Putin's place and look at the situation. Why should he listen to what Bush asks him to do with regard to Syria? When he can see with his own eyes that US allies have no intention of listening to Bush with regard to Syria and Iran?

The lame excuse is that they don't like Bush's style. What they don't like is a US policy that places integrity and consistency in foreign relations above expediency. So we are right back to the central debate, which pits the Bush Democracy Doctrine against the Chirac School.

And given that roughly half the US voters side with the Chirac School, those Americans young at heart enough to believe this can be Liberty's Century have a great deal of groundwork to do.

When more Americans get clear on the Democracy Doctrine and how it works in practice, there will be greater force behind the words of the US Secretary of State in negotiations with our allies. As it is now, we're just whistling Dixie. And Putin and a host of other national leaders know this.

This to include our dear ally Israel. What in the Sam Hill were the Israelis doing selling weapons to China? When Pundita last checked, there is only one China. So this would be the same China that helped the Iranians and every other Jew-hating government build nukes. Then Sharon rings up Bush, "Oh they've got the Bomb!"

But if you know that, then why did you sell weapons to China, which makes a career out of counterfeiting weapons and selling knockoffs to the highest bidder? What is this, the Kindergarten Age? Is this what our ancestors invented copper and iron for?

But I see we've descended from polemics to sputters, so this might be the time for a critter story. Most people don't know this but beavers are the best negotiators; they have to be, to avoid being mauled by creatures who don't have the concept of dam building down pat. The beaver has to clamber around the river bank and chew down trees. Imagine yourself a bear listening to that racket. So the beavers have to communicate to the local yokels that they don't plan to stay long and that all they want is some lumber.

One day I asked the beaver member of the team just how does a beaver negotiate logging rights? He replied, "Sincerely."

A reply to remember during our foreign relations dealings, especially during war. If we want Russia to throw up a few less roadblocks to the Bush war plan, the request should come with the sincere assurance that he won't keep pulling knives out of his back.

Saturday, January 29

Senator Kennedy's Eurocrat Party

"Pundita! Will you get your mind off Russia and Ukraine long enough to comment on the war? Also, are you going to comment about Condi's swearing in?? That has something to do with US foreign policy, you know. Also, what about Ted Kennedy's speech coming on the eve of elections [in Iraq]? Doesn't he realize he's encouraging the terrorists?...
[Signed] Not Born Yesterday in New York"

Dear NBY:

Please put Europe on your map of the world, if you want to follow foreign policy speeches made by the Kennedy faction in the Democrat Party. There are important meetings coming up next month between Bush and European leaders. That's why there was a stalling action on the vote for Rice. Kennedy's faction was trying to consolidate and send a message to EU leaders (the EU Three) ahead of the Bush visit. Also, Secretary Rice will embark soon on meetings with leaders of all the NATO countries. Her goal is to meet with all of them before the Spring.

To understand Senator Kennedy's speech one must cut through the rhetoric, which he used many times earlier, and look for the action plan he proposes on the virtual eve of Bush's trip to Europe:

The first point in a new plan would be for the United Nations, not the United States, to provide assistance and advice on establishing a system of government and drafting a Constitution. An international meeting--led by the United Nations and the new Iraqi Government--should be convened immediately in Iraq or elsewhere in the Middle East to begin that process."

Now what's wrong with that proposal, besides sending the needle on Pundita's Sahib-0-Meter into the red range? It's hot air because the elected Iraqi parliament can write their constitution and set up their government without the sahibs and the UN crowd showing them how.

Anyone with half a brain knows that, so what was Kennedy really saying with his proposal? He was saying to all European opponents of the Bush Doctrine that if they helped his faction of the Democrat Party put pressure on the Bush administration, he could deliver his faction to the Chirac School's view on foreign policy, which gives a central role to the United Nations.

If you're not following, kindly read The Central Debate . Return to the essay every time it seems that a Democrat or a Republican senator is spewing nonsense about foreign policy. It all makes perfect sense, if you understand that Bush's doctrine is a profound challenge to the Chirac School, which gained great power during the decade that followed the collapse of the Soviet Union. As long as US foreign policy was run from Brussels, the Europeans were content with any US president. Now they are not content.

Pundita's observations are not meant to slight your comments but to put them in context. Yes, from the view of Americans fighting in Iraq and the Iraqis going into their first democratic election, Kennedy's timing for his statements is irresponsible--although he stands in a long line, in that regard. However, your comments ignore a sea change in American politics, which profoundly impacts the US war on terror. There is a faction in the Democrat party that is reaching more across the Atlantic than across the aisle.

The Democrats aren't the only ones but the Republican involvement with EU interests is of a different order. The Republicans have more power in their relationship with Europe. The Democrats are in a weak position in their outreach to European governments, which makes them attractive to Europeans who are very intent on influencing US foreign policy.

The question is whether the Kennedy faction has enough power to dominate the Democrat Party at this time. In any case, it's anachronistic to think of the faction as leftist. President Bush signaled this during a debate when he told Senator Kerry, "You're on the Left Bank."

I am quite sure Kerry (and Kennedy) caught the play on words. That the European Union is to the left of the Republican party now has more significance than what Democrat leaders say about their party platform. If several Democrats would beg to differ, they'd better start differing at a louder decibel. Else, we can all save ourselves confusion by renaming the Democrats the "Eurocrat Party."

With regard to your request that I turn my mind to the war, Pundita is not an "armed conflict" blog, but there is only one post on this site that is not directly concerned with the war on terror. However, I make a special deal about the Ukraine situation and recent US policy toward Russia. That's because the situations are instructive regarding what the American political process will be facing from here on.

The tactics that Soros, et al. used in the effort to unseat Bush were learned in Serbia and Georgia, and refined in the Ukraine election. They failed in the US because they misread the American culture and the impact of certain media, such as talk radio, on the election campaign. They won't make the same mistakes twice.

The fights between the Republicans and the Democrats are like a magician's stage business, which distracts the audience's attention from the sleight-of-hand. This is a bad time to be distracted. During the 2004 US presidential campaign many Europeans said that given America's superpower status, they had a right to attempt to influence the outcome of the election. Many Americans were shocked by the statement. However, the point of view expressed by the Europeans is not new. It's just that a series of post-World War Two administrations had been compliant with the views of Europeans. All that changed when George W. Bush set US defense policy on a different course. The Europeans knew, better than the American public, that profound changes in US foreign policy would follow.

With regard to Dr. Rice, we greet the arrival of the new Secretary of State with hope and good wishes. We grimly await news of her meetings with European heads of state.

Strike up the band! Pundita discovers Yukos hired BKSH & Associates

Take a gander at this:

BKSH & Associates has been hired by Yukos Oil, the Russian oil giant whose former head, Mikhail Khodorkovsky, is awaiting trial for fraud and tax evasion. The firm’s efforts “center around keeping U.S. policymakers and administration officials informed about current issues” facing the company “in Russia and abroad.”

Yukos announced last month that it would go bankrupt if it were forced to pay $3.4 billion in back taxes, the amount sought by the Russian government.

No wonder the mainstream media started playing the same fiddle about Vladimir Putin. But of course! As soon as Yukos hired them, the geniuses at BKSH's parent company geared to DEFCON1 force readiness.

For those who live outside the Beltway or don't work for a major US media organization, no it's not really a conspiracy. It's just that much US news reporting boils down to passing along press releases and background briefings from lobbying/public relations firms. But BKSH is not just any old lobbying firm.

"BKSH is the name of leading-edge government relations consultancy for the 21st century. Created by the world's largest communications agency, Burson-Marsteller, it enables clients to mount US, pan-European and transatlantic campaigns. Wherever in the world BKSH operates, clients can rely on the same commitment: the promise of efficiency, effectiveness and excellence," the company boasts on its website.

BKSH & Associates is "a Washington-based bipartisan firm providing government relations services to a select number of domestic and international clients. The firm, a part of the Burson-Marsteller family, is led by Charles R. Black, Jr., who is best known as one of America's leading Republican political strategists, having served as senior advisor to Presidents Ronald Reagan and George H. W. Bush and as a spokesman for the Republican Party.

The firm's lobbyists, lawyers, communications professionals, foreign affairs specialists and researchers design and execute programs to help shape public policy. Clients include Fortune 100 companies, multinationals, small and mid-sized companies, trade and industry associations, foreign governments, state governments and municipalities."

Putin and his government are up against the 10,000 pound gorilla of public relations firms. This is what's known in the trade as being a captive customer. If BKSH tarnished Putin's image in the course of serving their Yukos client, Putin's solution is simple. Hire BKSH & Associates to buff his image.

Friday, January 28

Peter Lavelle's article OPEC Dethroned, Putin's "KremPEC" Arrives was published online in August 2004 but it's not 'dated' reading. His take on the Kremlin's moves regarding Yukos and the arrest of Mikhail Khodorkovsky may throw light on a dark corner of the opposition that's arisen in the US and Europe against Vladimir Putin. Conspiracy theorists and close observers of the Saudi oil ministry, get out your connect-the-dots board and start connecting.

Pundita has added Lavelle's very informative website to the sidebar. Note his recent news/analysis on the Russia-Ukraine situation.

Thursday, January 27

Pundita stumbles across Meddlers, Inc., aka New Atlantic Initiative

Stop the presses! Somebody notify Dr. Cohen! We've found the source of the US position on meddling in Ukraine and 93.5% of the weirdness that descended on US policy toward Russia.

No, the source is not the Washington Post editorial board! Nope it's not George Soros! It's not the post box in Belgium. And--are you sitting down for this?--it's not the State Department. It's....are you sitting down? It's....

That's the board of the New Atlantic Initiative (NAI), which is headquartered at the American Enterprise Institute (AEI) in Washington, DC. Alert readers will ask why there's no asterisk next to Colin Powell's name. We have no idea; perhaps some overworked typist's oversight.

But there you have it: the full explanation why there is a discrepancy between George Bush's democracy doctrine and how US foreign policy functions in Eurasia.

A look at the NAI roster makes it hardly necessary to read the mission statement but here's the objective:

The New Atlantic Initiative (NAI) is an international nonpartisan organization dedicated to revitalizing and expanding the Atlantic community of democracies.

ObjectiveThe NAI's central objective is to strengthen Atlantic cooperation in the post-cold war world by bringing together Americans and Europeans to work toward common goals, including:

--The reinvigoration of Atlantic institutions of political cooperation and consultation.

--The admission of Europe's fledgling democracies into the institutions of Atlantic defense and European economic cooperation, notably NATO and the European Union.

--The establishment of free trade between an enlarged European Union and the North American Free Trade Area as a complement to strengthening global free trade.

Translation: If you think American foreign policy will ever get out from under Europe's thumb, dream on hayseed.

Well this is one hayseed who has been jerked awake. America will disengage from the NATO-centric view of the world when the cows come home. And if President Bush doesn't tow the "new Atlantic" line, money says he'll run into powerful Senate Republican-Democrat coalitions that block his most important domestic initiatives.

I note in passing that the objectives of NAI throw light on another mystery, which is the limp-wristed support for the Iraq invasion by several Republicans who support the AEI view. But of course! The Iraq invasion (and Bush's Greater Middle Eastern Initiative) runs counter to Europe's views on how best to deal with the Middle East! Silly Pundita to have wondered.

This tirade is nothing against Mrs. Thatcher and other anti-communist stalwarts represented on the NAI board. Yet Americans do need to find their own way; we can't do that if we are perpetually locked into the European geopolitical view.

The AEI-NAI influence in Washington solves the riddle of Kuchma's fall from power, Colin Powell's slap in the face to the Russian people after the Beslan massacre, and many other US steps that don't make a lick of sense, if we want American foreign policy to reflect integrity rather than a double standard.

Integrity is not the only issue. Towing the NATO line during the Cold War meant that the US could call for embargo against certain governments for arms trafficking with despotic regimes but not other governments, such as Germany and France. US adherence to the "new Atlantic" initiative continues the tradition of the American government playing ostrich.

Pundita must cut short this writing to put ice on her ankles, which are black-and-blue from kicking herself for not thinking first of the AEI when she embarked on the wacky quest to make sense of US meddling in Ukraine.

Wednesday, January 26

Is that the end of the world I hear approaching? No, it's only the UN trying to influence the choice for the next World Bank president.

Or more likely China instigating the G77 to set up a howl, as if they need a push. Boiled down, the wailing is a preemptive strike on the next G7 meeting, which will once again be all about the debt burden of the G77 countries.

Gird yourself; the United Nations and G77 are just getting warmed up. It's not every year they hit a trifecta: World Bank president choice, the IMF Spring meeting, and a G7 meeting.

Stock your G7 Survivor's Kit while there's time; it will be too late during Gordon Brown's opening speech.

Tuesday, January 25

The Seven O'clock Intelligence Briefing

"Pundita, I don't know which upset me more, the Friday State Department briefing about Ukraine or Jamie Glazov's symposium on Ukraine. I have never read discussion that is so far from the main point, so full of inaccuracies, and which omits so many key facts--and that's just from Rachel Ehrenfeld's side [in the symposium] and she was making an honest attempt at objectivity! As for [John] Radzilowski, who's clearly an agendist, his discussion about Ukraine and Europe's role is so far off base it's frightening. You were right; the United States is left holding the bag for the machinations in Ukraine while Putin lectures us and western Europe shakes its head and says tsk tsk."
[Signed] Ann in Cincinnati"

Dear Ann:

If you really want to get your blood pressure elevated read Jonathan Steele's analysis of the Ukraine situation.

He writes, "The European Union has been weak and divided, missing the chance to exert a strong European line in the face of US strategic meddling."

Weak and divided, huh? Has this man never heard of the EBRD? He's right about the meddling "template" that's been used but not a word about George Soros's role so of course not a word about Soros's connection with State.

Even Stephen Cohen, who is remarkably objective in his analyses of Russia and other FSU countries, tiptoes around the subject of State in his latest writing about Ukraine for The Nation. It's the US media's cold war, not State's, to hear Dr. Cohen tell it. He did briefly mention Soros and the State Department during one discussion with John Batchelor in late November 2004. So, it could be that the editorial board of The Nation, which has received funding from a Soros organization, is reluctant to bring up the S word in a critical light.

However, Soros is not central to the discussion; he became so influential because his money and contacts were useful to the NATO-oriented viewpoint of State and other NATO member governments. And as my last post mentioned the US Establishment media outlets that Cohen complains about in his latest writing are also oriented to the NATO view. That means they cannot automatically be considered reliable sources if you want to know what's going on in Ukraine or any FSU country.

I've mentioned before that to pick up the thread one has to go back carefully over what happened to Kuchma. It might also be illuminating to study how the World Bank's PAL project, which was greatly concerned with assigning title to land in Ukraine, impacted the issue of land ownership in western Ukraine and along the Ukraine-Polish border.

This is a guess, but the property title issue might be a significant part of the story underlying clan wars that broke out and which helped Kuchma's fall from grace in Washington. Keep in mind that under the Soviet system the people did not have their own land. Once the Bank decided to apply De Soto's observations to Ukraine, this might have touched off an uproar.

I repeat, I am guessing. In any case, arguing about what the US and Europe did or didn't do to influence the Ukraine election is arguing after the fact. The ship had left the pier before the time Yushchenko threw his hat in the ring. Again, the real story is found in events leading up to Kuchma's fall from grace.

This said, Rachel Ehrenfeld got in the last word during the symposium and her word is on the money--literally.

Ehrenfeld: I agree, the people of Ukraine have the right to determine their own future for better or worse. But these elections were anything but fair, and contributing to the fraud were large contributions from the West–according to thousands of “orange demonstrators” who were paid $150 per day (!) for weeks, to stage demonstrations...Thus, the Ukrainian people know, first hand, that democracy can be bought. Is this the lesson the West wanted them to have? These elections left many Ukrainian confused. And rightly so. When mental hospitals are used to falsify election results, what can you expect?

I too, wish the Ukrainians democracy, freedom, and free market economy. However, I think that the way the regime change was enforced, will make their goal more difficult to achieve.

Think about the dollar figure Rachel mentions, applied to a country where the monthly income ranges between $30 and $120. For $150 a day those Ukrainian demonstrators would have voted for Donald Duck.

The debate between Radzilowski and Ehrenfeld is instructive reading for Americans trying to get better informed about international affairs. They both get in their licks. Radzilowski has thought-provoking observations about the wisdom of trying to bring several FSU countries into the European Union. However, the omissions and distortions that upset you can be applied to a major flaw in US news reporting.

Rachel is a good analyst but her expertise is money laundering. I am not familiar with Radzilowski and haven't bothered to research him, but he's surely an expert on East Europe/EU politics, from his discussion during the symposium.

If you put those two areas of expertise together and let them debate the Ukraine, well of course there's going to be gaps and distortions in the picture.

If you throw in Stephen Cohen, who is a historian specializing in FSU countries, you'd have illuminating background and analysis but still a narrow, distorted picture of the recent situation.

Add an expert on the lending to Ukraine by West Europe's version of the World Bank, the European Bank for Reconstruction and Development (EBRD), and you'd start getting the picture. The EBRD (of which US is a member) is the largest single investor in former Soviet countries.

If you throw in a World Bank director who oversees departments making Bank loan projects for Ukraine and an IMF director specializing in the region, things would start clarifying with amazing speed.

Toss in a summary of the history and makeup of Polish, Russian, Ukrainian clans and the oligarchs/crime bosses with the greatest interest in Ukraine.

Add an "oil patch" expert--someone who knows the oil and gas business.

Add detailed information about the State Department's "America Desk" involvement in the Ukraine during the past decade. [See Pundita posts on the desk.)

Last but not least corral someone who can explain in plain English what the BIS (Bank for International Settlements) has been telling Russia and Ukraine during the past two years about their balance of payments situation.

Then you'd have the picture, after you integrated all those knowledge bases. It might seem that the analysis and data collection (or expert collection) I've listed are daunting; they are, if you have to gather them all within a very short period of time and start analyzing from zero. But heck, this situation with Ukraine had been building for more than a decade.

News producers would argue that I'm talking about intelligence analysis and data collection, which don't constitute news. The argument is sophistry. Innumerable incidents during any 24 period can be called "daily news." Yet people don't turn to the news media to get a hodgepodge of data. They want to be informed about situations as long as they're paying attention to a news show.

Think of the amount of time Americans have wasted reading and watching the skewed news stories about Ukraine since November and the daffy editorials Cohen lambastes in his latest writing. Think of all the time we've wasted listening to American Talking Heads and congressionals argue about Ukraine when their opinions are so poorly informed they're on the moon.

If our news media had done their job during the past decade we could have had the story straight after only a few minutes of taking in the news about the Ukraine election. They didn't do their job. So now any American who wants to know what was really going on in Ukraine has to invest hundreds of hours in research and become an intelligence analyst.

Monday, January 24

The American Century, at last

"Pundita, Until I read your Saturday post I tried for more than two years to figure out what Bush is talking about. You're right, he's easy to understand if you go to the source. The media think Bush is so stupid they don't really listen to what he says. Now they are dreaming up wild theories about what his democracy speech means. Thank you for demystifying what he said. ...
[Signed] Caesar in San Francisco"

Dear Caesar:

The media don't think Bush is stupid; it's just that they haven't absorbed the extent to which his ideas represent a radical break from US foreign policy thinking.

For more than a half century American foreign policy has been lashed to the mast of NATO thinking. The NATO alliance has been vitally important to the US. The price tag is that there has been no real American foreign policy; there's been NATO policy, which overwhelmingly reflects the European view.

That's why many Americans spent the Cold War tearing their hair out over what they perceived to be incoherent and even insane US foreign/defense policy. However, the war itself--America's struggle against the Soviet Union--and the enemy's nuclear armaments masked the root cause of the incoherence.

An example is the widespread US protest that built against the Vietnam War. Americans slowly realized that Vietnam represented an unwinnable war because we couldn't declare war on the real enemies, which were Red China and the Soviet Union. See USS Clueless for an outline of the situation. Once Americans understood that our soldiers were locked in a proxy war with no end, they branded the Vietnam War as madness. However, the mad part was American foreign policy trying to do an imitation of Europe's. This point drifted untended through the subsequent decades until it met head-on with 9/11.

Proxy war greatly predates the nuclear arms era; it is longtime standard operating procedure for European governments; one look at a map of Europe tells you why. Proxy war, triangulation, detente--all that stuff makes perfect sense for a bunch of small countries jammed next to each other with approximately the same military power and population number. Yet when translated into policy for America, the European viewpoint produces the kind of weirdness that Jefferson Airplane captured in their White Rabbit lyrics.

It's ironic that an American president who is admittedly not comfortable with verbal language has tasked himself with articulating a purely American defense/foreign policy. However, he's doing a better job than is evident from US media analysis of his ideas, which is why Pundita always advises to go to the source first when trying to follow Bush policy.

If you read the description of the Millennium Challenge Account, it jumps out that the concepts of personal responsibility and accountability are cornerstones of Bush foreign policy. The cornerstones are also evident in Bush's views about education. You're not going to create a modern workforce if you keep passing children who can't read and write. The public schools have to be held more accountable.

In the same manner, we've spent a half century learning that if you invite a despot to vote in the United Nations, and in all other manner treat him as a democratically elected leader, this is not going to create a democratic leader out the despot.

The Bush Democracy Doctrine boils down to saying that you cannot keep giving despots a passing grade--not if the despots want something from you, such as big-bucks aid and big trade deals. You must demand accountability and responsibility and for this, clear standards need to be developed and enforced. Otherwise, despots assume they can keep on as they've been doing. Just as a generation of American public high school graduates assumed it was okay to read at the level of a 12 year old and get into college. The school system wasn't set up to provide feedback that it's not okay.

The Bush approach reflects a typically American viewpoint, or rather a reassertion of the American viewpoint. The viewpoint went into decline at the US news media level. The media are not so much anti-Bush as at sea. George W. Bush is laying the groundwork for a foreign policy that is free of NATO-centric and Euro-centric thinking. But that's a paradigm shift for the US news media, which spent more than a half century reporting on and analyzing an American foreign policy view that was dominated by European thinking.

We still have a way to go before an American policy fully emerges but the Bush presidency has made a good start.

Thank you for allowing me use your praise as a quote on the Pundita blogspot header.

Saturday, January 22

Bush Democracy Doctrine, simply explained

"Dear Pundita, I liked Bush's speech at the inaugural but I'm a little confused by it. I wonder if he's talking in general terms and how he intends to implement the ideas, which are very ambitious. Also, didn't you love the white coat Laura wore for the inaugural?"
[Signed] Claudia in Taos

Dear Claudia:

There is no mystery about the Democracy Doctrine; the ideas Bush sketched in his inaugural speech are already in effect although it's early days. His remarks are confusing only if you depend on secondary sources for understanding. If you go to the White House website and study the Millennium Challenge Account and the No Child Left Behind Act, you won't be confused.

You'll see that the ideas expressed in the inaugural speech reflect a typically Bushian approach to solving a systemic problem. The Democracy Doctrine is strong on accountability, standards setting, achievement tests. and performance review. It's results oriented.

In fact, Bush could make this easy for the commentariat if he directed them to study his No Child Left Behind Act. If you substitute "tyrant" for child and make a few other simple word substitutes, you're an instant expert on the Bush Democracy Doctrine. Let's try it with the first portion of the executive summary, with the substitutions shown in boldface:

As the world enters the 21st Century full of hope and promise, too many of our tyrants are being left behind. Today, nearly 100 percent of the world's tyrants are unable to understand democracy ....

Although education is primarily a state and local responsibility, democratic governments are partly at fault for tolerating these abysmal results. Democratic governments currently do not do enough to reward success and sanction failure in our education system

Over the decades the American government and other governments in developed countries have created thousands of programs intended to address problems in tyrant education without asking whether or not the programs produce results or knowing their impact on local needs.

This "program for every problem" solution has begun to add up -- so much so that there are thousands of aid/low-cost loan programs spread across God Only Knows how many agencies at a cost of billions of US dollars a year.

Yet, after spending trillions and probably even zillions of dollars on tyrant education, we have fallen short in meeting our goals for educational excellence. The academic achievement gap between tyrants and elected leaders is not only wide, but in some cases is growing wider still.

In reaction to these disappointing results, some have decided that there should be no direct involvement in democracy education for tyrants . Others suggest we merely add new programs into the old system. Surely, there must be another way, a way that points to a more effective developed world role.

The priorities that follow are based on the fundamental notion that an enterprise works best when responsibility is placed closest to the most important activity of the enterprise, when those responsible are given greatest latitude and support, and when those responsible are held accountable for producing results. This education blueprint will:

--Increase Accountability for Tyrant Performance:

Tyrants who improve achievement in democracy measures will be rewarded. Failure will be sanctioned. American agencies/foreign policy instruments will know how well the tyrant is learning and that they are held accountable for their effectiveness with annual assessments.

--Focus on What Works:

US tax dollars will be spent on effective, research-based programs and practices. Funds will be targeted to improve tyrant education and enhance teacher quality.

--Reduce Bureaucracy and Increase Flexibility:

Additional flexibility will be provided to American agencies, and flexible funding will be increased at the local level.

--Empower Governments of the Developed World:

Said governments will have more information about the quality of the tyrant's schooling in democracy. Tyrants in persistently low-performing schools will be given choice.

At this point the Bush Democracy Doctrine diverges from the No Child Left Behind Act. Lagging tyrants will not be given the same choice that say, sixth graders receive if they don't buckle down to math. But as you can see there is no mystery about how the doctrine is to work out in practice.

Will the No Tyrant Left Behind initiative work? Of course. Mortals can't rid the world of evil but we can rectify mistakes that set the modern world's tyrants in place and keep them in place. Today's batch are not conquerors. And almost none are products of real revolution or internal coup. The majority came to power on the back of skimmed aid/loan money from the big Western nations and/or big-nation machinations.

So today's batch are as much Frankensteins as tyrants. Today's tyrants didn't get to be tyrants without a lot of help from the world's most powerful countries, including the USA. So the Bush doctrine is aimed as much at NATO countries and China and Russia as at Iran, North Korea, and Syria.

I interject that's why I made such a fuss about the US machinations in Ukraine, which began before Bush came to office. If we want other governments to get serious about the Democracy Doctrine, US foreign policy must strive hard to keep its hem clean. Things we could get away with during the Cold War--no more, if we want other governments to raise their bar.

However, if you substitute "developed world governments" for the public school system, you can understand why several countries (and even some representatives of the American government) are putting up so much resistance to Bush's doctrine. They've had pretty much the same reaction as public school administrators on first hearing about the No Child Left Behind Act. These governments aren't used to being held accountable in their dealings with despots.

However, if the NATO "school system" cranked out tinhorn despots who refused to democratize their countries, that's a measure of how much the world's most powerful governments have held themselves to account, in their dealings with despots. So we all need to improve our performance.

Blaming only the tyrants is akin to blaming only the child, if he graduates high school unable to spell cat. The question is how he got that far, after generations of adults poured billions into the school system that was supposed to educate him to deal with the modern world.

Laura's inaugural coat and the matching suit are to die for. Pundita wants the knockoffs as soon as they're available.

Friday, January 21

"What do you mean Americans are practical-minded people? Bush's speech yesterday was more proof that Americans are crazy to listen to him. He is trying to make a religion out of democracy. [Signed] Pierre in Montreal"

Dear Pierre:

Let us choose not to frame foreign policy discussions as a mental health issue. Practicality is indeed a characteristic of Americans, which plays a significant role in the Bush administration's discussion about the direction of US foreign policy.

In support of this observation, I direct you to the poll conducted by Chris Core during his call-in radio show last night. In case the page link doesn't work after 24 hours, the poll question and two possible answers are:

"Do you believe President Bush's speech today calling for freedom everywhere in the world is an achievable goal?

"Yes, it's not only do-able, it's absolutely necessary.

"No, it's pie in the sky dreaming, not the real world."

When the poll closed, 81% of respondents answered yes with 19% in the nay category.

A close look at the WMAL-AM website tells the sharp observer that Core's audience is probably weighted with Republicans. But Core's show is a Washington institution; he deals nightly with local issues that cut across party politics. So the opinions of Democrat listeners are also strongly represented on Chris's call-in line. And Chris is widely listened to in the Greater Washington, DC region, which includes the District of Columbia and parts of the states of Virginia and Maryland. This means Chris talks nightly with many Real People who live Inside the Beltway or Not Far Outside. ("Real people" as distinguished from the lobbyists and other members of the political industry.)

Thus, Core's initial response to Bush's inaugural speech supports my observation that Americans are practical people. Straight off the bat, Core asked his audience whether they thought aggressively promoting democracy in the world is a realistic policy.

Core's question reflects the initial reaction of many Americans who listened to Bush's inaugural speech. Americans tend to ask, "Is it do-able?" when first considering any idea. Indeed, Core's poll explicitly calls up the question of "do-ability."

Now if you still don't believe that Americans think first and foremost in terms of do-ability--I doubt you get the PBS NewsHour in Canada, but that's America's "high end" mainstream broadcast news show. To analyze Bush's speech, Margaret Warner corralled two of her favorite Washington Wonks, Zbignew Brzezinski (Center for Strategic & International Studies) representing the Democrat camp and Walter Russell Mead (Council on Foreign Relations) for the Republican side.

Brezinski creamed Mead by asking repeatedly, "And just how do you plan on carrying out these ideas?" Mead was reduced to saying that it was still unclear but we'd figure out something. Zbig sat there and literally cackled in triumph.

I am making a point of practicality because I venture that peoples outside America are behind the curve of the discussion that's been building inside Washington since 9/11. Americans have always been big supporters of the ideal of democracy, but it's a leap to argue that democracy is the only practical form of government. (There's that word "practical" again.) You might wish to read The Central Debate , if you want to get oriented to the discussion.

To boil it down, if it is true that democracy is the only practical form of government, then democratic governments need to greatly revise their foreign policy, which includes foreign aid.

During the past century governments in developed nations tended to look the other way when dealing with despots who don't pose a military threat to the developed nations. Thus, expediency ruled much of foreign policy in democratic nations. The 9/11 attack, coming on top of many Cold War situations, eloquently made the argument that such expediency only extends to the shortest run--and only during eras when nukes couldn't be hauled around in a suitcase.

US citizens are now having to spend blood and umpteen billion dollars to clean up a century of expedient Western approaches to dealing with nondemocratic Middle Eastern governments.

The big question is what kind of policy the democratic governments should develop to implement ideas that Bush articulated yesterday. Last night Chris put that question as well to his listeners: If they agreed that Bush's idea is do-able, then--how to do it? Again, this kind of question is characteristically American.

Some do-able strategies have already been implemented. The Bush administration's Millennium Challenge Account initiative is one of them. Yet this is one task Americans can't do alone. It will take a paradigm shift, which is not here yet, before a solid majority of the world's democratic governments "get" Bush's main points. What they need is a crash course in American-style thinking. Pundita will do her best to oblige in her next post, "The Bush Democracy Doctrine, Simply Explained."

For now, I leave you with these thoughts: Once citizens in democratic nations get it--Americans don't have a corner on creative ideas. Humanity needs all the do-able strategies we can muster, if we're to pull off what many think is an impossible dream. As a spur to creative thinking, the dream masks a hard reality, which is that dire consequences attach to pandering to nondemocratic governments.

Thursday, January 20

"America, by what right do you lecture us on democracy?"

If you think the American government practices a double standard in dealings with undemocratic governments, that's a situation you can't do much about if you're not an American. What you can do much about is closely examine your own government's dealings with undemocratic governments; when you find instances of a double standard, lodge protest with your government. In this way, many hands make light work of ending oppressive governments.

To say that America's dealings with oppressive governments do not always meet our standard overlooks that with each US administration the standard has been set progressively higher. During his inaugural address today President Bush set the bar so high that even a Texan might ask whether he's committed America to a quixotic path.

Do not think that Americans don't ask such questions for we are a people characterized as much by practicality as by love of freedom. To be an American is to first ask, "Is it do-able?"

The answer is that it's not possible for America alone to run tyrannical governments off this planet. What Americans can do is set a standard for their own government's interactions with oppressive regimes and struggle to insure that their government meets the standard.

As to America's right to exhort other governments to do the same--the United States is a young country but its government represents history's oldest written constitution. The United States is the world's oldest republic and democracy. So if the right to lecture is conferred by age, the American government has the right to lecture on freedom.

Wednesday, January 19

The Second Rule of Foreign Policy

"Dear Pundita:

Isn't the World Bank's PALll project (Ukraine) and similar projects correcting the type of mistakes you noted about the Bank's development loan model? I think the Bank's lending policy has become sensitive to the need for establishing the basic mechanisms of democratic government in developing countries.
[Signed] Kumar in Bethesda"

Dear Kumar:

Okay, let's look at PAL-2. First we'll read the first three sentences (written in Bankese, which means they take up half a page) from the PAL-2 project description:

"The Second Programmatic Adjustment Loan (PALII) Project will continue deepening the program of achievements, in the five thematic areas of the first PAL operation: fiscal and financial Discipline; regulatory reform; creating and protecting property rights; public sector accountability; and, management of social and environmental risks. The project will encourage policy coordination - PAL provides an anchor for the pro-reform constituency in the Government and the Verkhovna Rada, it acts as a catalyst for change, and it is able to direct technical assistance to areas so requiring. Wider participation of civil society in the design, and implementation of reforms will be supported, as will the continued macroeconomic stability, through the establishment of structural reforms, crucial for growth over the medium term. "

All that sounds helpful toward creating a modern civil society, one that supports the mechanisms of democratic government. Now let's break down all those words into crystal-clear English:

(There's a fourth contract--for computers. The contract was awarded to a UK company; that contract is also pocket change--pocket change in USD, that is; it takes about 5-1/2 Ukraine hryvnias to buy 1 US dollar.)

Readers who have been following the situation in Ukraine will intuit something odd about the PAL-2 way of helping to install the mechanisms for democratic government in Ukraine. Well, yes--if installing such mechanisms is the primary goal, it would be skewed priorities to borrow half a million bucks to conduct an analysis on how to make Ukraine's legislation conform with WTO policy.

However, that's not the goal. The Bank has clearly stated their goal with regard to Ukraine. From "Ten Things You Never Knew about the World Bank in Ukraine," here is the #1 thing that we (to include the American commentariat on the Right and Left) never knew, unless we lived on the World Bank website, of course:

"1. For Ukraine, European Union integration is proving a challenging task. The Ukrainian government’s “European Choice” program aims at harmonizing Ukraine’s laws and practices with those of the European Union. The World Bank is supporting this program by helping Ukraine establish a more inclusive and responsive government, with a view to forging closer relations with the EU."

Alert readers might be scratching their heads at the "European Choice" reference. Yes, thanks to the Canadian press and the research talents of the bunch at World Socialist Web Site, Pundita's readers are aware that more than one choice was under consideration. Kuchma had discussed the possibility of Ukraine joining a trading bloc with Russia. That set off a panic in EU circles, which reverberated in Washington.

Further discussions were suspended after the howls went up but just the EU fear that Kuchma would go ahead with the plan was probably his undoing, leaving aside other factors. If you look at the dates on those PAL-2 contracts it's obvious the ship had left the pier before Yuschenko's election campaign. Under Kuchma Ukraine had been on a track to join the EU and NATO; the Bank wouldn't have committed the funds to PAL-2 if they'd thought otherwise.

Pundita repeats herself here: The World Bank is a one-trick magic show. To the extent that better business practices and freer markets help democracy, the Bank helps democracy. But the World Bank, as with all development banks, is founded on the concept of the development bank project loan. The loan model is meant to be a trickle-down aid to economies. The same model is used, only there is a mid-step inserted: bring the Ukraine government's way of doing things in line with EU and WTO practices.

The other night Stephen Cohen gave John Batchelor's audience a summary of the thinking on the US side that led to strained relations with Putin. He finished by observing that the first rule of foreign policy is that actions have consequences.

Here's the second rule: Know exactly what your country's foreign policy instruments are doing in any given fiscal year.

Tuesday, January 18

Pundita contests William Safire's counsel to the "quality" news media

Dear Mr. Safire:

Re your observations, "America's quality [news] media are now wading through the Slough of Despond. Our self-flagellation, handwringing and narcissism threaten our mission to act as counterweight to government power."

It should not be the mission of the news media to act as a counterweight to government power; that mission belongs to the electorate. The mission of the news media should be to inform the citizen public about events that critically impact the public.

There are good reporters. Yet somehow it happened that the Establishment became the employer of many who believe that a reporter's job is to place the American government in the dock.

The upshot was plainly evident on the morning of September 11, 2001, when millions of Americans stared in disbelief at their television sets and told themselves that the plane must be off course. Even after seeing the second plane, millions of Americans still couldn't believe that it was attack. That's how poorly the US new media had done their job in the decade running up to 9/11. So Americans had to learn the hard way that the world's lone superpower nation had a news media fit only for a banana republic.

What you call "quality" media became a tabloid for Beltway food fights. The major American press and television news build front pages and newscasts around the day's food fight and call that "the daily news." They do this to such an extent it's not worth a busy person's time to routinely follow the Establishment news outlets--not if staying informed about vital news is the goal.

Thus, I came across your January 17 opinion piece only by clicking on a link on Drudge's site, which led me to Der Spiegel's online post of your piece for The New York Times.

I interject that if the Times thinks they can routinely get my attention via an "exchange" arrangement with Spiegel Online and similar attempts to ape the format of new news media, they are wrong. I almost clicked out of the Spiegel site immediately on seeing the Times banner. It was only the title given your piece, The Depressed Press , which staved off the mouse click.

That doesn't mean I never read reports in the Times. But to find the occasional informative sentence embedded in a Times report, I depend on trustworthy "new" news media researchers and analysts to do the digging. I don't have the time to sift paragraphs of opinion and Beltway tabloid news just so I can mine a few bits of data I can pick up more quickly and easily from other sources.

With regard to the self-flagellation, handwringing and narcissism--well, if the media you term quality were actually quality, they wouldn't have time for all that, would they? This is in consideration that America is at war, and that the Establishment spent the decade running up to 9/11 depending greatly on the BBC for news and views about what's happening outside American shores. So the Establishment should have no time for anything but to catch up and help the American public catch up.

This observation brings me to your remark that "clean government needs a snooping adversary..."

No, Mr. Safire. Just being a snoop and an adversary leads to the media becoming a pawn of the factions that most need watchdogging. Clean government requires a professional news media doing their job.

It seems to me that the slough of despond is mostly pique that millions of Americans no longer depend on the Establishment for opinion. The best therapy is to stress that respect for the opinions of journalists must be earned; it's not something bestowed by a title or the name of a media organization.

Every day I take in opinion that I don't agree with, but which I consider because the people giving the opinion have earned my respect. They've earned it with painstaking work to bring vital news to the public. As far as I'm concerned, that right has already been earned by several members of the "new" media.

Monday, January 17

The UN's Paper Sword

In late December Claudia Rosett updated John's audience on Kofi Annan's stonewalling. She pointed out that the history of Kofi's actions as head of the UN demonstrate that there would be nothing behind any US government assumption that a "greater good" could be served by supporting Kofi's refusal to resign.

What I find unsettling about her observation is that it reminds me of John Loftus's discussion with John more than a year ago about ElBaradei. I've been reminded of that discussion several times since, as IAEA negotiations with Tehran have unfolded.

Loftus detailed that the US had the goods on Baradei, who for years during Saddam's rule put on a blindfold with regard to al-Tuwaitha. Loftus said that Tuwaitha is so radioactive that Putin had to warn Bush that US troops should take care not to bomb the facility during the invasion of Iraq.

When John asked why the Bush administration didn't use what they had on Baradei to blow him out of the water, Loftus replied he didn't know. But he speculated that Baradei with the goods on him might be seen by the administration as useful in pushing Iran hard on their nuclear weapon program.

If that's how the Bush administration was thinking, we've all seen how useful Baradei has been with the goods on him.

I understand the need not to convene Kangaroo Court but not rushing to judgment works both ways. The initial Bush stand on Annan, after the UN Oil-for-Food investigation captured US headlines, was "wait on the evidence." Okay. But then don't find Annan innocent ahead of the evidence.

Maybe the best course for the Bush administration is to use the rest of Annan's tenure to figure out what the US should do about the United Nations. Annan, after all, is simply the most visible symbol of the UN problems, which are systemic.

The question is whether the system can be fixed without remaking the UN from the ground up. This point was brought home to me while reading an essay Ever Always by the Belmont Club author, who once again exposes the root of a problem:

"The [UN] Security Council's structural defect is part of its design. It was meant to freeze international action, not promote it. Paralysis is a Security Council feature not a bug. While international multilateral action from recorded history has always been carried out by nations whose interests momentarily coincide, the Security Council was carefully constructed to consist of rivals whose interests clash, each with a veto over the other.

"The proposals put forward to limit international military action to the Security Council are tantamount to preventing alliance action because all "legitimate" international action is made the province of the parties in conflict. This recipe for enhanced stasis, as Gourevitch points out, has ironically been advanced under the "the Rwanda never again clause" -- when in fact it amounts to a "Rwanda ever always" clause, as the Congolese and Sudanese know to their cost."

The security council is the sword arm of the United Nations. Time and again the "enhanced stasis" that is the council has resulted in the UN wielding a paper sword against crises such as Sudan. Only the crushing weight of the United States, brought fully to bear, loans the security council a sword of steel.

However, the United Nations, as with the IMF-World Bank, was conceived as a US policy instrument. Now that our policy instrument has gotten away from us, do we really want to see the UN Security Council in possession of a steel sword?

Pundita has been asked to explain her nomination of Eliot Spitzer for the next World Bank president. I pick Spitzer because the challenge he faced in dealing with Wall Street parallels the greatest challenge the incoming World Bank president will face--or rather should face. But understanding why Spitzer is the Man for the Job requires a grasp of how the development bank loan model works in practice. So first a crash course:

Contrary to popular understanding the IBRD project loan was created to directly benefit business, not government. This makes sense if you consider that the IBRD was conceived as an economic means to help a country rebuild and develop. The model is the grandfather of the Trickle Down theory.

The loan money is disbursed to a government but the government pays out to contractors to execute the project. That's why a wag once referred to the Bank as "One big procurement scam." However, it's not a scam. In certain situations the model works beautifully; it works as intended when a country has to get back on it's feet. For example, the model helped put many European businesses back on their feet after WW2. That in turn helped build up Europe's postwar economies.

But the IBRD loan model did not change when it was applied to help countries that had never been on their feet in the first place. The only change was the IDA financing. To quickly grasp what's wrong with applying the IBRD loan model to the least developed countries, take this quiz:

1) People in your neighborhood are blowing each other up, hacking each other to death with machetes, and living on bugs for dinner. The solution is to write low-cost loans to widen your neighborhood's street and rebuild the local community center. This is so your local cement business and building contractor can avoid shutting their doors.

TRUE___

FALSE___

2) If you answered TRUE to the above. After five years of implementation of the above loans, people in your neighborhood are still blowing each other up, hacking each other to death with machetes, and living on bugs for dinner. The solution is to write even lower-cost loans so that your local flower vendor and coffeehouse can stay open.

TRUE___

FALSE___

The IBRD is a one-trick magic show. Behind the kaleidoscopic stage business, which is the numberless types of Bank-financed projects--construction, education, environment, agriculture, the list is endless--is one unchanging factor. All those government-sponsored projects underwritten by IBRD and IDA loans are executed by contractors, which the debtor government (with Bank approval) chooses.

Here we come to a snag. If the project loans are really to help the country get on its feet by helping the business sector, the government can't rely exclusively on contractors from developed nations to do the project work. That would be counterproductive. The local contractors must be given work on the projects, even if it's only subcontracts.

Yet even the international megacontractors, such as Bechtel, face big challenges when overseeing the work of many contractors from developed nations. When the oversight task must include many score or hundreds of contractors from an underdeveloped country, the problem with applying the IBRD model to the poorest countries stands up and shouts. The IDA loan is never big enough--cannot be big enough--to finance the kind of oversight that would insure efficient use of the project loan money and block the worst graft.

The Bank does factor in a certain amount of inefficiency on the project and a certain amount of embezzlement when writing the project loan. But that hardly deals with the problem. There are two types of corruption involved with World Bank loans. (And with all development bank project loans.)

First, there is embezzlement of Bank loan funds at the administrative level--the debtor government level. This type of corruption is famously associated with despots who receive Bank loans. The despot's government routinely peels off millions of dollars from Bank loans.

I interject that is not counting outright theft. One of a despot's many tricks is to have a military unit put on black clothing and ski masks then sneak into the project site at night to steal heavy equipment.

The next morning, when the poor World Bank project engineer sees all the cranes and bulldozers gone, a fence from the same military unit shows up and offers to sell some cranes and bulldozers from his brother-in-law's business. Then the despot spends the profit on more military expenditures, so he can terrorize his people and neighboring countries all the more.

Second, there are the many varieties of fraud practiced by shady contractors the world over since contracting began. (This doesn't include the loan money wasted by honest local contractors who are still in the learning phase.)

In theory, the first type of fraud can be blocked by very close Bank oversight, which the World Bank has attempted during the past decade in particular. The sticking point is that despots aren't idiots. They figure the only reason they're getting low-cost loans is because their country is sitting on a natural resource that a World Bank member(s) find useful. And/or their country has reaped the windfall of being in a location that a World Bank member (e.g., a NATO country) finds to be of military importance.

So when the Bank auditors arrive the despot raises himself to his full height and thunders, "Are you calling me a crook?"

Right there is one reason Eliot Spitzer is specially qualified to lead the World Bank. He dealt with that kind of situation all the time when he was chief of Manhattan's Labor Racketeering Unit.

"What? You're calling us racketeers? We'll have to shut down the docks for a week while we talk to our attorneys about suing for slander."

The second type of fraud explains why the Bank has firmly resisted bringing in outside auditors. If you conduct independent forensic investigation of the amount of Bank loan money that is routinely stolen or wasted by contractors connected with Bank projects in least-developed countries, the Bank's credit rating will tank.

Then the Bank would be trying to sell junk bonds to finance their lending. That would not allow the Bank to support their lending practices. In other words, the World Bank would go out of business. At least, that is the Bank's excuse for not dealing with their central problem.

For readers who are familiar with the blowout on Wall Street, the Bank's excuse sounds remarkably like excuses Wall Street trotted out to resist making real changes. When they saw the lynch mobs forming across America, Wall Street firms called on each other to take executive action. However, the proposed actions had nothing to do with the central problem, which is that stock offerings are no longer only "to the trade."

The IBRD project loan model is also "to the trade." The model was not conceived for countries where the most basic governing infrastructures in a modern civil society were never there, or so gone they'd have to build from scratch. Leave aside the crooks; how can you sue a shoddy contractor in a country where contract laws are nonexistent and the judicial system runs completely on bribes, if it runs at all? This leaves no way to impose standards on the work of local industries.

Then visitors from developed countries ask, "Why doesn't anything work here? And by the way, why does the drinking water in these countries always smell like goat poop?"

Yet the Bank has spent decades resisting a change to the IBRD project loan model, in the same way Wall Street spent decades resisting changes to their way of business. In the mid-20th Century, Wall Street's resistance would have been justified. People are responsible for their own investment decisions. So if they lose their shirt--well, that's Wall Street. But Spitzer's call for reform recognizes that stock offerings are no longer only to the trade. Wall Street not only accepts but now depends on investments from many millions of people who know nothing of the business of trading stocks and bonds.

In the same manner, developed countries should not write loans to "least developed" countries when they know the government doesn't have the same institutions in place that allow developed countries to properly utilize low-cost loans. For the least developed countries, such loans only add obstacles to creating a functioning civil society.

Here is a good summary of Eliot Spitzer's thinking about the need for Wall Street to move into the 21st Century:

"Spitzer tells FRONTLINE that his investigation led him to the conclusion that Wall Street's whole business model in the late-1990s, in which stock analysts were fully integrated into the investment banking operations of brokerage houses, was not only "fundamentally corrupt" but, in fact, fraudulent. The only solution, he believes, is for Wall Street to implement the "structural reforms" agreed upon in the [global] settlement, in which analysis and investment banking are walled off."

With little adjustment, those observations could apply to the World Bank. It is time to set up a wall between the IBRD project loan model and the governments of the least developed countries. That would mean considerable pain for many honest businesspeople because the problem went untended for decades. This is another reason Spitzer is the logical choice for Bank president. He learned to turn a selectively deaf ear to the piteous cries of the doomed on Wall Street.

The IBRD loan model was conceived as a crutch, but the model eventually generated a contracting subculture. The subculture is totally dependent on government business derived from Bank loans. This translated into a devastating effect on business progress in the least developed countries.

If companies are so weak that the only way they survive is by getting business from loan projects made to the worst governments in the poorest countries, the Bank must carry out triage.

The bottom line is that the relationship between IDA project loans and companies that service the loans is so entwined that there's going to be severe pain, no matter how you fix the problem. But letting the problem stand is akin to refusing to amputate a limb that gangrene has destroyed.

Of course, Eliot Spitzer's investigation into Wall Street practices had the force of the US legal system behind it. He wouldn't have the same force behind him at the Bank. Yet Spitzer knows the terrain of Establishment resistance to calls for structural reform. He's been there, bought the T-shirt and the DVD. Above all, that is why Eliot Spitzer is the best choice for the next World Bank President. Even if he only took the job for a year, as interim president, humankind would benefit.

Sunday, January 16

Here's a useful website for Americans who would like to avert World War V

"Pundita! Please stick your head out of your cave once in a while! Eliot Spitzer wants to run for governor of NY. He wouldn't take the job of World Bank President even if he was offered it. [Signed] Not Born Yesterday (in New York)"

"Why Eliot Spitzer, Pundita? Am going to link to your post [on Spitzer] but wondered what the reasoning was.[Signed] David in Dorset, UK"

Dear NBY:

Believe you me, at this juncture the world needs Eliot Spitzer much more than the state of New York.

Dear David:

We confess to a moment's trepidation before clicking on the link you provided, after we saw that you're situated Across the Pond. We wondered whether it was one of those websites that exhorts readers to splash themselves with chicken blood and hop up and down outside IMF headquarters during the Spring meeting. The ritual terrifies the squirrels, you understand.

We are happy to report to our American readers that your website worldbankpresident.org is wonderfully civilized--and intelligent as well. Frankly it's a shame that the idea for the website didn't come from an American.

Of course it's vitally important that Americans take a profound interest in the choice for the next president of the Bank; a website dedicated to news about speculation regarding the choice provides a valuable service to Americans not to mention humankind at large.

So you want to know why Pundita likes Eliot Spitzer for the next Bank president....I imagine you've Googled Spitzer's name, but perhaps a close follower of the Bank's doings would also need to have followed the nightly news in America, while Spitzer was on a tear with Wall Street, in order to instantly grasp why he is the only rational choice for next President of the World Bank.

All right, Pundita will explain her reasoning in her next posting, "Why Eliot Spitzer is the Man for the Job."

For readers who can't stand the suspense kindly plow through the speech Sebastian Mallaby gave in October 2004 at the Council on Foreign Relations regarding his book on the World Bank. Take special note of the glaring contradiction between Mallaby's passing along the Bank's apology for corruption, and his acknowledgment that it's not possible to determine what part, if any, the Bank has ever played in any government's success stories.

Readers should also click on the link provided at your site, or go directly to the UN's Global Policy Forum to read the reprint of a Wall Street Journal editorial on the Bank. The editorial makes it clear that an independent audit of graft that Bank loans have financed will be conducted over the dead bodies of World Bank governors.

If one puts Mallaby's discussion of corruption together with the above point and tosses in Spitzer's time spent prosecuting labor racketeers, it shouldn't take a crystal ball to intuit the gist of Pundita's next post.

However, corruption is not the Bank's central problem. Because few people understand how the Bank works, for all the countless words written, explaining the problem in a few simple words will be a challenge. But Pundita will give it a try because to understand the Bank is to realize why Spitzer should be in top post at the Bank for at least a year.

Friday, January 14

System Failure: The Democracy Stage Show, Part II

The following exchange took place in 2000 during a Q&A session at a BBC-sponsored forum on the World Bank.

"My question is regarding my country. In the cold war era the World Bank gave money to Mobuto and his government knowing very well that money was being used for his personal use and I think that money was to keep there and prevent communism being spread around Africa. Why should the people of the Congo pay for this debt because we never used the money and Mobuto was an illegal government?"
--Serge Tshamala, Maryland, USA (from RD Congo)

"I think the whole issue of Mobuto and the Congo troubles you and everyone who has something to do with Africa. The question of where the money went and what the objections were at the time is something I can't really answer seeing as I wasn't around. I can tell you that in recent years there has been an enormous effort on the part of the Bank to make sure money is used on social and other programmes and the incidents of debt try to be alleviated. Your country is one which is suffering from the most terrible political problems and we are working closely with the UN to try to get the country back on an even keel."
--James Wolfensohn, President, World Bank

As if to mock Wolfensohn's final comment the present situation in several African countries underscores that the World Bank working with the United Nations to get things "back on an even keel" is not a winning formula.

Yet to be fair the Bank has always been a prisoner of a certain kind of macroeconomic thinking that has little to do with the real world. The point is pounded home in a writing by the IMF's chief researcher, Raghuram G. Rajan.

The essay, written in plain English, should be required reading for Americans who want this to be "liberty's century." Or at the least, want their tax dollars to go to more effective efforts at helping LLDCs ("least developed countries"--the polite way of referring to countries that are such a mess they can't be even be considered "developing").

Democracy embodies an ideal but in practice it's a form of government. How the government is administered--the nuts-and-bolts daily grind of how the government works out in practice--is critical to a functioning democracy. Development banks such as the World Bank group have always recognized that, but much of their "institution-building" in the poorest countries has ignored the basics. The judicial buildings are erected, always with fanfare. The bureaus required to keep a government functioning are set in place. Behind the trappings, nothing works.

So things function in the country, to the extent they function, via bureaucratic fiat and graft. Our government has not been completely blind to this problem. Here's an excerpt from a somewhat self-congratulatory speech given in 2004 by Robert B. Charles, Assistant Secretary for International Narcotics and Law Enforcement Affairs, in testimony before the House Committee on Government Reform:

"Democratic Institution Building and The Rule of Law

"To improve the rule of law, USG projects also have assisted the Government of Colombia in establishing 37 Justice Houses (casas de justicia), which increase access to justice for poor Colombians. Make no mistake: this is not a small victory or goal -- it is at the very heart, in our view, of sustainable progress and U.S. support. So far, these casas de justicia have handled over 2.2 million cases, easing the burden on the over-taxed, inefficient judicial system.

"Remarkably, the Department of Justice and USAID “Administration of Justice” initiatives have also established 30 new Oral Trial courtrooms and trained over 10,000 lawyers, judges and public defenders in new oral legal procedures designed to reduce impunity and quicken the judicial process. The new accusatorial criminal justice system will be open to public scrutiny and is expected to be more efficient and effective, and thus more worthy of public confidence."

All that is good news. The bad news is that the obstacles to democracy in LLDCs are more basic than the problems mentioned by Charles--so basic it's hard for people in developed countries to wrap their mind around the situation.

For example, Americans take for granted the concept of "property ownership." We also take for granted that there are laws to define and protect the legality of contracts. A democracy without these two concepts in operation is unthinkable. Yet in many countries neither concept is operational. So no matter how many judicial courts and bureaus the development loans install, it's a stage show if the country has "democratic" in its name.

Thursday, January 13

No Chopped Liver

Pundita is shocked at the names on the list of candidates being tossed around for the post of President of the World Bank after Mr. Wolfensohn leaves at the end of May 2005. None of the people on the list are even remotely qualified for the post. European sources have said that Bank shareholders want to avoid a selection process along political lines and hope the candidate will be chosen on his qualifications. I couldn't agree more. But because a team of Dobermans can't be charge of a bank Pundita nominates Eliot Spitzer for the post.

In search of where we are now

"I tried to figure out your political affiliation by reading your old posts. I gave up. Can you tell me which party you favor?
Caesar in San Francisco"

Dear Caesar:

From the long view, 9/11 was the post-Cold War era crashing in on the fantasy world that American political parties and the American news media had been living in since the end of the Soviet Empire. After 9/11 President Bush undertook the necessary task of re-coupling US foreign policy with US defense. But elements of US foreign policy are still wandering around in the mid- to late decades of the 20th Century. And when the bubble burst Americans didn't recognize the world outside our shores.

So this is not a partisan or even political situation. The situation is to find the 21st Century. That's what we do here in Pundita-land. Instead of slogging through bogs to watch rare birds or prowling forests to find wild mushrooms, we go in search of where we are now.

Rugby the Rat Vindicated

Pundita is determined that this blog shall not become a message board for wildlife, lab rats, and canine members of the Bush family. However, the foreign policy team will give me no peace until I pass along this item from the January 10 Discarded Lies blog titled Rugby Vindicated .

"Something Rotten in the State of Ukraine"

"Pundita, the more I read about the Ukraine election, the more confused I become about whether democracy was really served. There are strong arguments on both sides."
[Signed] June in Cincinnati"

Dear June:

At least you're looking at both sides, which is what Americans need to do, if we want to forge good foreign policy for this era.

Pundita has observed before that the situation in Ukraine is complex. No small part of the complexity is due to the simple fact that almost all US news media ignored the situation in Ukraine until it blew up. The media ignored the situation for years--despite America's deep involvement in Ukraine during those years. So of course the situation is confusing because it's tons of new data to sort through and hitting all at once.

But keep at it because once you learn the way things work with regard to one situation the knowledge transfers to other situations. After a time you'll see certain patterns emerge, then following the international news will become much easier.

With regard to Ukraine, there are two issues: the claims of fraud during the election, and the pre-election situation that brought so much outside influence and money to the election during the past two years.

Take cheer from the following report , "Something Rotten in the State of Ukraine," written by an observant and idealistic American eyewitness to the situation. He, too, is trying sort things through....

Even Wendy had to grow up

"Dear Pundita:
I got so angry at the French after I learned they sold weapons to Saddam even when they knew we were planning to invade Iraq. I stopped drinking French wine and threw away my French cookbooks although I got them out the trash after I realized I couldn't live without them. My blood boiled all over again when I read your essay about the Chirac school of foreign policy. At least Tony Blair has been a good friend to America and democracy.
[Signed] Caesar in San Francisco

Dear Caesar:

To expect that any government in that vast contiguous bunch of nations across the Pond is going to be "friends" with any other government is expecting too much of human nature.

Tony Blair was not acting as a "good friend" to America when he sided with Bush on Iraq. He was acting in Britain's best interests. Germany and France had gained too much power in the EU, from the viewpoint of several British MPs and their constituents. The Germany-France-Belgium-Luxemborg alliance threatened to marginalize Britain. Blair's decision to join Bush's "coalition of the willing" in Iraq was a brilliant strategy for helping Britain right the balance of power.

Now before you get so disappointed with Blair that you never to eat plum pudding again, you need to put the concept of "alliance" in context. This is what--the eighth TV season of Survivor? So, Americans should know by now that alliances are very conditional. The alliance lasts as long as both parties find it useful; all bets are off the moment one party's interests diverge from the alliance's rationale.

There are Survivor contestants who become friends after their time in the game is ended. But only the most hypocritical or naive among them expect that vows of friendship during the game signal any more than strategy.

In the same maner, if Tony Blair wasn't a national leader he could be considered a good friend to America. I think he genuinely likes Americans and that he has very deep gratitude for the help the US gave Britain during the two world wars. But you need to look at the other side of the story, as well. Jacques Chirac has made it clear that he doesn't like Americans; he doesn't like our culture. At the same time, once Chirac saw Blair's strategy, which threatened to isolate the FrancoGerman-led alliance in the EU, Chirac and his German counterpart threw more help to the US war on terror than they like to broadcast.

French forces have been fighting alongside American special forces in formerly French-controlled African countries where al Qaeda got a foothold. And the French government joined Bush's strategic alliance to interdict ships used by al Qaeda and/or which carry contraband material, including WMD components. That's how Libya was caught red-handed.

France and Germany did not betray America by going against Bush on Iraq. They acted according to their perception of their best interests, as they have done all along. You could argue that their perception is wrong--that their policy with regard to the Middle East in general, and Bush's decision on Iraq in particular, is unwise. Yet the simple truth is that the world changed greatly for the Europeans after the Soviet Union dissolved; the US news media and the US public did not keep up. The upshot was that most Americans were stunned by Germany and France's divergence from the US over the Iraq situation.

The only stunner was the US Department of State's abuse of their power in the attempt to bring down a sitting US president and commander-in-chief during a hot war. If you want to use the language of "betrayal," that was the knife if the back--not only the president's back, but also the American people's back. Because State workers are also American, it can be hard to fathom why they acted in such manner.

To be generous, probably the majority of State employees who wanted to get rid of Bush acted in what they considered to be America's best interests. If so, they were correct about America's best interests--for the eras of the 1950s and 1960s. But by the 1980s, Gene Kelly's Paris was long gone.

And by the 1990s, the KGB villains had been replaced by oligarchs rich and ruthless enough to sell entire governments down the river, and whose modus operandi resembled that of the crocodile in Peter Pan. The Europeans knew what they were really dealing with and they knew the vast majority of Americans didn't know. So in the manner of Peter Pan they assured State, "Don't worry, we'll be your guide to the Neverland created by the fall of the Soviet Empire."

So it came down to a day at the United Nations, as Americans sat before their TV sets and watched in disbelief as the French and German governments told America to go sit on a tack.

Okay, we've had our adventure in Neverland. Now it's time for the State Department and the American public to ditch the role of Wendy. The hands on the alarm clock have moved. Time for America to grow up. In this way, we avoid the extremes of blind trust and bitterness.

Roasting a sacred cow

The Diplomad's recent posts contain anecdotal criticism of some UN umbrella organizations. I find the criticism notable coming as it does from authoritative sources inside the US Foreign Service. One of the arguments for the US staying with the UN is that some of the UN umbrella organizations (e.g., UNICEF) do valuable work. Diplomad makes a good start at roasting that sacred cow.

During the past year I've abandoned my position that it's impractical for the US to leave the UN no matter how badly the organization functions. I now think it's impractical to stay with the UN, simply because there is so much wrong with the UN that starting anew is much better than throwing good resources after bad.

The time and resources of Americans are best spent creating agencies that do the same "valuable work" as the UN umbrella organizations--but do the work efficiently and without massive corruption, and specifically to serve the cause for democracy.

Speaking of the UN, I am troubled by Matt Drudge's mention last night on his radio show that there is a growing friendship between President Bush and President Clinton. I suspect this odd coupling has more do with Bush giving Clinton a look-over for the job of UN Secretary General than it does with budding friendship. Clinton has been angling for the job.

If by chance Bush thinks Clinton could be made useful to US foreign policy he would be practicing selective amnesia or making a dangerously cynical reach across the political aisle.

President Clinton's defense policy left this country wide open for a catastrophic military attack, put US foreign policy under the control of the group that runs the European Union, and turned the State Department into a lackey for the EU.

Mr. Clinton is not fit to oversee a chicken coop, much less a world body. That many Democrats still don't realize this speaks only to the vile quality of news reporting in this county during the Clinton era and since.

"Anyone but Kofi" is not the way to deal with what's wrong with the United Nations. If the American people want an organization where humane governments can discuss and resolve on world problems, the UN is not that place.

The place might be a new international organization that sets and maintains stiff criteria for admission--and get the criteria right this time. No more treating despots as if they are democratically elected. Granted, this approach leaves US foreign policy little wiggle room. The alternative is to keep flushing billions of aid and development bank dollars down the toilet.

And launch serious public discussion on whether a permanent "world body" should exist at all. Perhaps ad hoc agencies and meetings would be a better way for this era.

"What Julia Child did for French cooking, Pundita is doing for foreign policy discussion. She's opened a haute pursuit to ordinary people." - Caesar Rodriguez

"Few bloggers think as deeply as Pundita does. And few have her foresight." - Uppity Woman

"There is no other blogger like Pundita. She has carved a niche - part history and part humint - that makes any essay of hers a thing unto itself. In addition there are the sparkles of her dry wit sprinkled through her work." - Dymphna, Gates of Vienna